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Sri Lanka's deposed Prime Minister Ranil Wickremesinghe said the United States and Japan had frozen more than a billion dollars of development aid after his abrupt dismissal raised doubts about the future of democracy in the island.The move to hold back project financing, along with the EU's warning it could withdraw duty-free concessions for Sri Lankan exports if it didn't stick to commitments on national reconciliation, will further strain the economy, Wickremesinghe told Reuters in an interview.President Maithripala Sirisena fired him last month after months of tensions within the government and appointed Mahinda Rajapaksa as premier in a shock move that has plunged the nation into a political crisis.Rajapaksa is a former president who led the country to a military defeat of Tamil separatist guerrillas in 2009 but who has since faced widespread allegations of human rights abuse and targeting of Tamil civilians.Wickremesinghe, who has challenged his dismissal and vowed to remain Prime Minister until parliament voted him out, said there were international concerns about a government led by Rajapaksa.“Countries are sensitive, they have concerns (about a government led by Rajapaksa) democratic countries have concerns,” he said in the interview conducted in the prime minister's official residence in a colonial-era bungalow where Wickremesinghe is camping along with his supporters.The United States has held off on a nearly $500 million aid programme for building of highways and improving land administration by the government-funded Millennium Challenge Corporation (MCC), Wickremesinghe said.Japan had also put on hold plans to extend a soft loan of $1.4 billion for a light railway project, he said. “A lot of projects are held up, the Millennium Challenge, the Japanese loan,” he said.The Sri Lankan embassy in Washington has been informally told by the MCC that around $480 million will be on hold because of the latest situation in the country, a Sri Lankan foreign ministry official separately confirmed to Reuters.An official at the Sri Lankan Ministry of Megapolis and Western Development also confirmed the freeze to Reuters on the Japanese loan, imperilling the project.An official at the Japan International Cooperation Agency said the agency was closely monitoring political developments and the railway project loan had been withheld.The US embassy in Colombo had no immediate comment when asked if Washington is taking any measures due to the Sri Lankan political crisis.While Wickremesinghe is staying on in the premier's residence called Temple Trees, Rajapaksa has taken over the offices of the prime minister following his swearing in. Wickremesinghe said his party will step up a public campaign for parliament to be called and he be allowed to prove his majority. “We are all contemplating alternative actions, this includes a big mobilisation of people. Ultimately this has to be decided in parliament.”Soon after taking over Rajapaksa said he wanted to end the ”politics of hate” in the country and that his government will work for justice for all citizens.

The duo speaking to reporters at Temple Trees insisted that the removal of Prime Minister Ranil Wickremesinghe and proroguing of Parliament by President Maithripala Sirisena was unconstitutional, and renewed calls to reconvene Parliament as early as possible. Hashim heavily criticised Prime Minister Mahinda Rajapaksa loyalists who had earlier censured the UNP for allowing the rupee to depreciate but had failed to arrest its decline since 26 October.

“These are the same people who went around saying that if they were in power, they would stop the rupee depreciation in hours.

Where are these people now? What are they doing? When they are in the Opposition they are full of promises, but when they are in power they do nothing. The Central Bank has had to spend $100 million since 26 October to defend the currency, and this is likely to increase unless Parliament is convened and this issue resolved,” he said.

Hashim also said that an estimated Rs. 7 billion in foreign investments had flowed out of the Government securities market as a result of the constitutional standoff, which is now over a week old. He insisted that this was a larger outflow than the amount from January to September 2018, and expressed fears that the outflow would worsen if political uncertainty continues.

Quoting from Moody’s statement last week, that detailed Sri Lanka’s heightened risk for debt refinancing due to the prevailing political uncertainty, he pointed out that an increase in interest rates would make borrowing more expensive for Sri Lanka. From 2019, Sri Lanka has to repay an estimated $12 billion as debt repayments till 2022, most of which need to be raised from international capital markets that decide interest rates based on macroeconomic fundamentals of a country.

“The agreement for the third phase of the Kandy highway was to be signed this week, but now that has been put on hold. The JICA loan for $1.4 billion for the Light Railway has been suspended. We had obtained funding for the new Kelaniya bridge project and were told that the next tranche would be delayed. These issues are impacting the development of the country. Who will take responsibility for these consequences?”

Hashim also mentioned the $460 million Millennium Challenge Cooperation grant that may be reversed unless Sri Lanka upholds democratic principles. MCC was earmarked primarily for infrastructure-related development efforts. The UNP MPs were adamant that under the post-2015 administration significant infrastructure developments had been made, and these were in danger of being derailed by the change of Prime Minister.

“Why are they so scared to show a majority in parliament? Members of Parliament are not children. They are intelligent enough to make up their own minds. We say with responsibility that we still hold a majority. They are spreading rumours of dissolution of Parliament to scare MPs into joining them,” Wickramaratne said.[/size][/size]

Insists suspended loans by international partners hampering development

Eran renews call for Parliament to be reconvened

The economic impact of the dragging Constitutional crisis could potentially hamper Sri Lanka’s debt refinancing efforts in 2019, and delay critical development projects, warned United National Party (UNP) General Secretary Kabir Hashim and UNP MP Eran Wickramaratne yesterday.

The duo speaking to reporters at Temple Trees insisted that the removal of Prime Minister Ranil Wickremesinghe and proroguing of Parliament by President Maithripala Sirisena was unconstitutional, and renewed calls to reconvene Parliament as early as possible. Hashim heavily criticised Prime Minister Mahinda Rajapaksa loyalists who had earlier censured the UNP for allowing the rupee to depreciate but had failed to arrest its decline since 26 October.

“These are the same people who went around saying that if they were in power, they would stop the rupee depreciation in hours.

Where are these people now? What are they doing? When they are in the Opposition they are full of promises, but when they are in power they do nothing. The Central Bank has had to spend $100 million since 26 October to defend the currency, and this is likely to increase unless Parliament is convened and this issue resolved,” he said.

Hashim also said that an estimated Rs. 7 billion in foreign investments had flowed out of the Government securities market as a result of the constitutional standoff, which is now over a week old. He insisted that this was a larger outflow than the amount from January to September 2018, and expressed fears that the outflow would worsen if political uncertainty continues.

Quoting from Moody’s statement last week, that detailed Sri Lanka’s heightened risk for debt refinancing due to the prevailing political uncertainty, he pointed out that an increase in interest rates would make borrowing more expensive for Sri Lanka. From 2019, Sri Lanka has to repay an estimated $12 billion as debt repayments till 2022, most of which need to be raised from international capital markets that decide interest rates based on macroeconomic fundamentals of a country.

“The agreement for the third phase of the Kandy highway was to be signed this week, but now that has been put on hold. The JICA loan for $1.4 billion for the Light Railway has been suspended. We had obtained funding for the new Kelaniya bridge project and were told that the next tranche would be delayed. These issues are impacting the development of the country. Who will take responsibility for these consequences?”

Hashim also mentioned the $460 million Millennium Challenge Cooperation grant that may be reversed unless Sri Lanka upholds democratic principles. MCC was earmarked primarily for infrastructure-related development efforts. The UNP MPs were adamant that under the post-2015 administration significant infrastructure developments had been made, and these were in danger of being derailed by the change of Prime Minister.

“Why are they so scared to show a majority in parliament? Members of Parliament are not children. They are intelligent enough to make up their own minds. We say with responsibility that we still hold a majority. They are spreading rumours of dissolution of Parliament to scare MPs into joining them,” Wickramaratne said.

When you copy and paste please check the font size through preview, because some of the contents are missing and instead of that size 17, size 19 appearing in your post.

Insists suspended loans by international partners hampering development

Eran renews call for Parliament to be reconvened

The economic impact of the dragging Constitutional crisis could potentially hamper Sri Lanka’s debt refinancing efforts in 2019, and delay critical development projects, warned United National Party (UNP) General Secretary Kabir Hashim and UNP MP Eran Wickramaratne yesterday.

The duo speaking to reporters at Temple Trees insisted that the removal of Prime Minister Ranil Wickremesinghe and proroguing of Parliament by President Maithripala Sirisena was unconstitutional, and renewed calls to reconvene Parliament as early as possible. Hashim heavily criticised Prime Minister Mahinda Rajapaksa loyalists who had earlier censured the UNP for allowing the rupee to depreciate but had failed to arrest its decline since 26 October.

“These are the same people who went around saying that if they were in power, they would stop the rupee depreciation in hours.

Where are these people now? What are they doing? When they are in the Opposition they are full of promises, but when they are in power they do nothing. The Central Bank has had to spend $100 million since 26 October to defend the currency, and this is likely to increase unless Parliament is convened and this issue resolved,” he said.

Hashim also said that an estimated Rs. 7 billion in foreign investments had flowed out of the Government securities market as a result of the constitutional standoff, which is now over a week old. He insisted that this was a larger outflow than the amount from January to September 2018, and expressed fears that the outflow would worsen if political uncertainty continues.

Quoting from Moody’s statement last week, that detailed Sri Lanka’s heightened risk for debt refinancing due to the prevailing political uncertainty, he pointed out that an increase in interest rates would make borrowing more expensive for Sri Lanka. From 2019, Sri Lanka has to repay an estimated $12 billion as debt repayments till 2022, most of which need to be raised from international capital markets that decide interest rates based on macroeconomic fundamentals of a country.

“The agreement for the third phase of the Kandy highway was to be signed this week, but now that has been put on hold. The JICA loan for $1.4 billion for the Light Railway has been suspended. We had obtained funding for the new Kelaniya bridge project and were told that the next tranche would be delayed. These issues are impacting the development of the country. Who will take responsibility for these consequences?”

Hashim also mentioned the $460 million Millennium Challenge Cooperation grant that may be reversed unless Sri Lanka upholds democratic principles. MCC was earmarked primarily for infrastructure-related development efforts. The UNP MPs were adamant that under the post-2015 administration significant infrastructure developments had been made, and these were in danger of being derailed by the change of Prime Minister.

“Why are they so scared to show a majority in parliament? Members of Parliament are not children. They are intelligent enough to make up their own minds. We say with responsibility that we still hold a majority. They are spreading rumours of dissolution of Parliament to scare MPs into joining them,” Wickramaratne said.

When you copy and paste please check the font size through preview, because some of the contents are missing and instead of that size 17, size 19 appearing in your post.

"When you copy and paste please check the font size through preview" Good to check back the post for errors